Business Cycles

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Murray N. Rothbard

One of the most difficult things to understand about banking is how money is created out of thin air.  Current commercial bank liabilities are immediate. The banks do not have the reserves to redeem all demand notes. Thus, banks are inherently insolvent. But, government has eliminated runs on banks. Banks are not allowed to fail when they are mismanaged.

D.W. MacKenzie

Overall economic efficiency does not concern GDP growth per se, writes DW MacKenzie. It concerns the satisfaction of consumer demand. Increased military spending does not directly satisfy consumer demand. Nor do increased deficits and monetary stimulation substitute for market forces. They only set in motion another round of cyclical economic trends.

Paul F. Cwik

To help explain the complex analytics behind the Austrian Theory of the Business Cycle, an analogy seems to help. Suppose that, in his 8:00 a.m. class, a student was assigned a paper which is due tomorrow. Of course, he has not yet started working on it. In order to finish the paper on time, he decides to pull an "all-nighter."

Christopher Mayer

To most, the strong housing market has "saved" the economy by providing consumers with fresh purchasing power and housing gains have helped cushion many from the withering blows of the stock market’s decline.

But the housing boom is not an unmitigated good.

William L. Anderson

While one hopes that this current sorry situation does not metastasize into a full-blown calamity reminiscent of the Great Depression, there are some not-so-obvious but important issues that need to be raised if we are to climb out of this economic mess.

Mark Thornton

Sustained long-term economic growth, of course, is good for human health and life expectancy. But what about the business cycle when government generates periods of overly speculative investing and even stock market hysteria followed by unemployment and bankruptcy? What are the health consequences of an economic frenzy fueled by money creation?

John P. Cochran

As the Austrian explanation of the business cycle has gained adherents, the debunkers too want their voice heard. At the heart of Edmund Phelps's misrepresentation of Austrian business cycle theory is his capital theory and a lack of an appreciation for the important role of saving in the wealth creation process. Robert D. McTeer makes a similar error in his defense of Keynes's paradox of thrift.